SKS Technologies Group Ltd (ASX: SKS) shares are $6.99 apiece, up 3.1% on Friday.
This has been a bad week for SKS Technologies investors, who have seen their stock plummet 20% in value.
A couple of factors are likely playing into the share price drop.
Let’s investigate.
Why have SKS Technologies shares dropped?
SKS Technologies specialises in the design and installation of electrical technologies and digital infrastructure, including data centres.
It appears the company has been affected by the fallout from the much-anticipated Firmus ASX IPO not going ahead.
Firmus designs and operates data centres. The founders confirmed that the ASX IPO would not proceed last Friday.
Over the past five days, SKS Technologies shares have fallen 20%.
On Tuesday, SKS Technologies responded to a price query from the ASX.
The ASX noted that SKS Technologies shares had traded at an intraday peak of $8.605 before closing at $6.89 on high trading volumes.
SKS Technologies said:
The Company notes that there have been recent announcements involving participants in the broader data centre sector which may have influenced investor sentiment toward companies exposed to the sector.
The Company is not aware of any information that will adversely impact existing projects, or future opportunities relevant to SKS.
The Company’s work in hand and pipeline remains consistent with the ASX announcement as disclosed on Tuesday 7 October.
SKS continues to maintain a strong pipeline of opportunities and remains actively engaged in converting those opportunities into secured
work.The Company has not received any communication indicating that any future opportunities have been delayed or cancelled and, in recent months, has continued to receive additional inbound opportunities that further support its future growth prospects.
Firmus shareholder and electrical infrastructure contractor, Maas Group Holdings Ltd (ASX: MGH), was also affected by the IPO cancellation.
The Maas share price has fallen 17% this week.
What else has happened?
SKS Technologies Executive Chair Peter Jinks, Executive Director Greg Jinks, and an associated entity of CEO Matthew Jinks sold 10 million shares on-market last Wednesday, 7 October.
That was a day after SKS Technologies announced the awarding of an additional $38 million of work at a Melbourne data centre project.
The majority of the 10 million shares sold belonged to Peter and Greg Jinks.
The sale represented approximately 30% of the shares held by the Jinks family.
ASX disclosures show the shares sold for an average $10.48 apiece.
Peter and Greg Jinks each sold 4,457,000 SKS Technologies shares worth a combined $94.4 million.
SKS Technologies issued a statement explaining why the family had sold such a large position.
The company said:
The Share Sale was in response to a high level of inbound interest from investors, and the Vendors determined that the Share Sale will support the marketability and liquidity of SKS shares, as well as for wealth diversification purposes.
The Jinks family will hold ~21% of the Company and will remain the majority shareholder following completion of the transaction.
SKS Technologies added:
The Jinks family retains strong conviction in the future prospects of the Company and have no intention to conduct further sales for the foreseeable future.
The SKS Technologies share price fell 12% on the day investors learned of the sell-down.
SKS Technologies will hold its annual general meeting (AGM) on Thursday, 26 November.
The post SKS Technologies shares tank 20% after Firmus IPO flop and directors' $94M sale appeared first on The Motley Fool Australia.
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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sks Technologies Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.